Legislators consider impacts of proposed greenhouse gas rules

December 3, 2014

On November 19, the Senate and House Committees on Commerce and Labor met to consider the possible statewide impacts from a proposed Environmental Proctection Agency (EPA) rule to limit greenhouse gas emissions from power plants. EPA is expected to finalize the rule on carbon emission by the end of 2015 with it taking full effect by 2020.

Under EPA’s proposed rule, each state is assigned a specific goal for limiting emissions of carbon dioxide. Virginia’s goal is to reduce emissions by 38 percent from 2012 levels by the year 2030. The proposed rule also requires all states to submit to EPA implementation plans by a specific deadline. During the Joint Committee meeting, presentations about the proposed rule’s impact upon Virginia were made by representatives from the Department of Environmental Quality (DEQ), the State Corporation Commission (SCC), Dominion Resources, PJM (responsible for constructing and maintaining a large part of the electrical grid), Appalachian Power, Virginia Electric Cooperatives, the Southern Environmental Law Center (SELC) and the office of the Attorney General. Most presentations had information critical of the proposed rule and concluded that the impacts upon Virginia would be significant, both in terms of the state’s economic competitiveness, the effect upon rates paid by customers and service reliability.

Here is a summary of the major concerns voiced by DEQ, utilities, and organizations representing ratepayers to the joint committee about the proposed EPA rules:

Virginia’s 38 percent target for reducing CO2 emissions from power plants is more strict than many other states.

EPA’s proposed rule severely limits (to 6 percent) the level to which Virginia can be credited with emissions reductions from nuclear power. (Currently, nuclear power provides about 30 percent of Virginia’s electricity needs. Nuclear power emits no greenhouse gases.)

The proposed rule will significantly increase rates paid by consumers. According to SCC, the estimated increase for the average residential consumer will be about $300 per year. According to Dominion’s estimates, rates will increase by approximately 30 percent.

The proposed rule will require costly retrofits for existing power plants. Normally, it’s typical for new federal environmental regulations to only affect newly constructed facilities.

Because the rule is scheduled to take effect in 2020, utilities are concerned they will not have enough time to prepare.

Not all presenters at the meeting were critical of EPA’s proposed rule. For example, the SELC presented information supporting EPA’s proposal and produced estimates that the rule will generate about 38,000 new jobs in Virginia because it will drive up production of renewable energy sources. SELC also testified that rate increases have been overestimated by the utilities and SCC.